Malaysia and Japan plan major cross-border carbon capture project,
despite climate benefit doubts
[February 17, 2026] By
ANTON L. DELGADO
BANGKOK (AP) — Japan wants to ship carbon emissions to Malaysia in a
first-of-its-kind project in Southeast Asia for carbon capture and
storage, a widely debated process that critics say is more symbolic than
effective in curbing climate change.
Despite such doubts, Malaysia is positioning itself as Southeast Asia's
hub for the alternative technology, a three-step process that captures,
transports and buries carbon dioxide which contributes to climate
change. With about 81% of Malaysia's electricity generated from fossil
fuels, climate activists say carbon capture is an expensive distraction
from proven emissions-reducing actions such as transitioning to
renewable energy.
Japan, one of the world's top carbon emitters, plans to ship emissions
from its heavily polluting industries –– spanning electric power, oil
refining, cement, shipping and steel –– to Malaysia within the next few
years. If the project succeeds, experts say it may blaze a path for
other Southeast Asian nations with carbon storage potential, like
Indonesia and Thailand.
Detractors say it will slow progress of already off-track global efforts
to curb emissions.
The plan “dangerously shifts the burden of climate change onto Malaysia
rather than onto Japan," said Rachel Kennerley, a carbon capture
specialist with the Washington-based Center for International
Environmental Law.
Doubts about carbon capture
The debated process starts with capturing emissions directly from a
polluting source, like a refinery or power station. This can be done in
different ways, such as retrofitting a facility to emit directly into a
storage location or by building vacuumlike structures to suck up
emissions.
While Japan and Malaysia have yet to share detailed plans, the carbon
dioxide will likely then need to be separated from the other captured
gasses emitted during industrial processes.
The carbon will then be liquefied and later transported in specially
designed ships to burial sites, likely in depleted gas fields off the
coast of the Malaysian state of Sarawak on the island of Borneo.
After the liquefied carbon is injected into the ground the site will
have to be monitored for leaks.
Some governments and fossil fuel giants like Exxon Mobil and Shell
promote the strategy as a climate solution that buys time for countries
and industries to transition to cleaner energy.
The European Union’s first offshore carbon storage facility, taking
emissions from Denmark and injecting them into the seabed below the
North Sea, is due to start operating by mid-2026. A Norwegian facility
launched last year is testing cross-border carbon shipments.
There is “an almost fantastical theoretical uptick” in carbon capture
interest, said Grant Hauber, with the U.S.-based Institute for Energy
Economics and Financial Analysis. He said it “offers a tantalizing
promise that just won’t deliver.”
While the International Energy Agency considers carbon capture,
utilization and storage a tool for curbing climate change, the IEA's
latest Net Zero Emissions scenario forecasts it will contribute less
than 5% of emission reductions by 2050.
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In this Oct. 21, 2013, file photo, smoke billows from an oil
refinery in Kawasaki, southwest of Tokyo. (AP Photo/Koji Sasahara,
File)
 Malaysia pushes for carbon
capture
Malaysia passed a bill last year promoting the carbon capture
industry. Without providing details, the Ministry of Economy, which
declined to comment, projected the fledgling sector could add up to
$250 billion to the economy within 30 years.
Malaysia’s state-owned oil and gas company, Petronas, is leading the
$1.1 billion construction of what will be world’s largest offshore
carbon storage facility, slated to begin operations by the end of
the decade. Petronas declined to comment.
Rather than investing in proven decarbonization actions, like solar
energy rollouts or grid development, Eqram Mustaqeem, who campaigned
against carbon capture in Malaysia, said “we're spending high
amounts of money on a technology that is under-delivering and
unproven."
Japan pilots cross-border project
Fossil fuels generate the lion’s share of energy in Japan, which is
among the world's top five highest carbon emitters.
Japan is investing in nine carbon storage sites, three of them in
Malaysia, to try to cut its net emissions. It estimates that by
2030, the sites will store 20 million tons of carbon annually,
roughly 2% of Japan's yearly emissions.
Malaysia will likely be paid an undetermined amount per ton of
emissions stored. Japan could then subtract those emissions from its
total carbon output.
Officials from Japan's state agencies leading the project, the
Ministry of Economy, Trade and Industry and the Japan Organization
for Metals and Energy Security, or JOGMEC, did not respond to
requests for comment.
Government documents show a range of Japanese companies intend to
ship emissions to Malaysia.
Carbon capture or ‘climate colonialism’
Ayumi Fukakusa, of the advocacy group, Friends of the Earth Japan,
called the idea of exporting emissions to other countries “carbon
colonialism.”
Apart from the doubts about the effectiveness of carbon capture,
critics also object to the idea of managing emissions rather than
reducing them.
“Japan gets to keep polluting and driving climate change, while
claiming to ‘clean up’ its emissions by shipping the carbon to
Malaysia," said Kennerley of the Center for International
Environmental Law. She said that will make Malaysia “a carbon
dumping ground for industrial pollution” and detract from climate
action.
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